Caveolin-1 (Cav-1) has been suggested to function as a negative regulator of mitogen-stimulated proliferation and the Ras-p42/44 ERK (MAP kinase) pathway in a variety of cell types. However, the molecular basis of this suppression has not been clarified. Spred/Sprouty family proteins are also negative regulators of the ERK pathway by interacting with Raf-1. The Spred/Sprouty family proteins contain a cysteine-rich (CR) domain at the C-terminus, which is thought to be palmitoylated like Cav-1 and necessary for membrane anchoring. In this study, we demonstrated that Spred-1 localized in cholesterol-rich membrane raft/caveola fractions and interacted with Cav-1. To clarify the biological effect of Cav-1/Spred-1 interaction, we used hematopoietic cells that lacked expression of caveolins but expressed Spred-1. Forced expression of Cav-1 suppressed SCF- and IL-3-induced proliferation and ERK activation. Furthermore, forced expression of exogenous Spred-1 in Cav-1-expressing cells further suppressed proliferation and ERK activation. These data suggest that Spred-1 inhibits ERK activation in collaboration with Cav-1.